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Citigroup fell over 3% over the last few days, and CCI took advantage of this gyration to close the covered call position. This resulted in a very modest .5% gain in about two weeks. Of course it would take much longer to generate that return in cash or bonds.
Since the position was established on Jan. 8 the approximate performance numbers are
- 8.9% - simply holding xlf
- 20.4% - holding the Jan $15 Leap (due to the increased risk/reward of the leverage)
- 19.1% - the combined long/short position described here
Obviously there is plenty of time left on the position (Jan 15) ...so anything can still happen.
CCI will look to re-establish a short position in Citgroup calls if/when the market gyrates upwards.